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About the Author

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

Logistics News

By Cliff Holste

July 8, 2015



Logistics News: Sales Order Automation - Increases Speed & Reduces Labor

Is Same-Day-Shipping Fast Enough?


Holste Says:

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Given the vast amount of instant information we now have available at our finger tips (there are apps for everything) the deployment of automated and fully integrated logistics technologies is the overall best strategy.
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Previous Columns by Cliff Holste

Sorting It Out: Improve DC Efficiency With Alternative Storage & Picking Methods

Sorting It Out : Improving DC Performance - Back To The Basics

Sorting It Out: Depending On Size, Shippers Think Differently About Order Fulfillment Operations

Sorting It Out: Conveyor System Capacity Constraints Impact Productivity

Sorting It Out: Project Planning Ideas

More


Most shippers are focus on the physical movement of goods through the DC. However, it could take a day or so to get customer orders through the order entry, approval and acceptance process. Not done yet - it could take another day to verify and allocate inventory and for load planners to release the orders into the DC order fulfillment system. Finally, the orders can be quickly picked, packed, sorted and shipped. Unless of course, the carrier had not yet arrived or there is no dock loading space available, in which case shipping will be further delayed.

Perhaps the above sounds familiar. However, if this typifies your operation, you may need to ramp-up you’re game. The rapid growth of online retailers in the consumer goods marketplace has emphasized the need for speed. Today business happens around the clock, geographic boundaries have been erased, and logistics technology never ceases to innovate. Amazon.com has been offering free same day shipping to their Prime customers and is now offering free same day delivery in 14 metro areas across the U.S.

It’s interesting to note that despite having a very hard time generating even modest profits, Amazon .com continues to ramp-up and expand its free shipping programs, causing more challenges for its competitors who may be trying to keep pace.

 

Order Entry Automation is Key to DC Speed

Conveyor systems are now capable of transporting and sorting cartons in the 250 to 300 per minute range. Dematic recently introduced the FlexSort SL2® which has an advertised sort rate of 380 cases per minute. This is especially good news for multi-channel DCs that experience peaks 2X or 3X the average. Also, good news for large retail chain store operations making it possible for them to consolidate smaller regional DCs into one high volume central operation.

Regardless of how a DC is equipped (manual or automated), if it can satisfy customers’ demand for same-day shipping it probably meets today’s criteria for being a fast DC. However, physical speed (getting product out the door) is not the only qualification for being fast – there are other service related factors. For example, B2B and B2C customers want to check the availability of inventory and the status of their orders on-line avoiding the time it takes to get through to a customer service representative. This requires network transparency and high speed integrated transactional capability.

That starts with the adoption of Order Entry Automation. Online e-Commerce sales transactions occur 24/7/365. It’s standard practice for online customers to receive a notification email containing relevant order details that sets the order fulfillment process in motion and confirms the shipping date within a few minutes of placing the order. Conexiom www.conexiom.com , located in Vancouver, British Columbia, is one of technology providers that offers a solution that integrates customer orders immediately as they arrive in any format. Conexiom captures and transforms computer-generated customer orders directly into order fulfillment sales orders automatically. This level of automation allows orders to be processed in minutes rather than hours or days with 100% data capture accuracy. Some of the key benefits of order entry automation include:



 
  • Faster order confirmations
  • More accurate order entry
  • Easier ability to answer and respond to enquiries
  • Consistent service regardless of channels
 

In the cyberspace world, where a millisecond is like “forever”, DC speed includes being able to synchronize the activities of multiple warehouses, or multiple vendors in the supply chain to provide a seamless real-time view of inventory and order status beyond the four walls of the DC. That means integrating internal DC systems with the logistics systems of external trading partners so that customer order status can be monitored and/or expedited in real-time.

It means updating IT systems with visibility tools that increase DC speed by allowing trading partners and customers across the supply chain to receive alerts and notifications when events occur, or don't occur, so that service providers can take proactive steps rather than just react.

Given that DC speed involves a blend of physical movement, and information flow, what are the governing factors?

 

Is it sending electronic data interchange (EDI) and advance shipping notices (ASN) over the Internet?

Is it monitoring deliveries and shipments via GPS tracking?

Is it a Continuous Order Processing (COP) strategy?

Is it the ability to change/adjust in-process orders instantly?

Is it multi-channel selling with a same-day shipping guarantee?

Or, is it a fast, accurate, customer friendly returns policy?


For most shippers the answer is - all of the above.

All of the above are tested and proven methods that really work to speed up transactions throughout the supply chain and are deployed in the top performing logistics operations. But they need to be put in the context of your business model and your company’s need for speed.


Final Thoughts

While the accelerated movement of goods is critical to obtaining high performance, the focus should not be on the physical aspects alone. Given the vast amount of instant information we now have available at our finger tips (there are apps for everything) the deployment of automated and fully integrated logistics technologies is the overall best strategy.

 

 

Recent Feedback

Great article. I am a little suprised not to see BNSF in the mix while I understand their financial mode/operation is a little different. 

That would only give a complete perspective with all the players in the pool.


Srihari
Senior Consultant
Infosys
May, 22 2016

Surprised to see Home Depot fall off the list; thought they were winning with Sync?


Mike O'Brien
Senior editor
Access Intelligence
May, 26 2016

Using the right tool for the right job has always been a best practice and one of the reasons, we feel, that RFID has never taken off in the DC as exponentially as pundits have been forecasting since 2006. While these results may seem surprising to those solely focused on barcode scanning, the adoption of multi-modal technologies in the DC makes perfect sense for greater worker efficiency and productivity.


Julie Leonard
Marketing Director
Inovity
Jun, 27 2016

The IoT Platform in this year's (2016) Hype Cycle is on the ascending side, entering the "Peak of Inflated Expectation" area. How does this compare to the IoT positions of the previous years, which have already peaked in 2015? Isn't this contradicting in itself?

Editor's Note: 

You are right, Internet of Things (IoT) was at the top of the Garter new technology hype curve not long ago. As you noted, however, this time the placement was for “IoT Platforms,” a category of software tools from a good number of vendors to manage connectivity, data communications and more with IoT-enabled devices in the field.

So, this is different fro IoT generally, though a company deploying connected things obviously needs some kind of platform – hoe grown or acquired – to manage those functions.

Why IoT generically is not on the curve this year I wondered myself.

 

 


Carsten Baumann
Strategic Alliance Manager
Schneider Electric
Aug, 19 2016

I agree totally with Mr. Schneider.

I have always lived by "put it in writing" all my work life.  I am a firm believer of the many benefits of putting everything in writing and I try to teach it to as many people as I can.

This "putting in writing" can also be used for almost anything else.  Here are some general benefits (only some) of "putting in writing":

1. Everything is better understood between parties involved.  There are lots of people types who need something visual to improve their understanding.
2. Everyone can read to review and correct anything misunderstood.  This will ensure that all parties concerned confirm the details of the agreements as correct.  This is further enhanced by having all parties involved sign off on a hard copy or confirm via reply email.
3. Everything has a proof.  Not to belittle the element of trust among parties involved, it is always safest to have tangible proof of what was agreed on.
4. There will be a document to refer to at any time by any one who needs clarification.
5. The documentation can be useful historical data for any future endeavor.  It provides inputs for better decisions on related situations in the future.
6. This can also be compiled and used to teach future new team members.  "Learn from the past" it is said.

There are many more benefits.  Mr. Schneider is very correct about his call to "put it in writing".






Jo Ann Tudtud-Navalta
Materials Management Manager
Chong Hua Hospital, Cebu City, Philippines
Aug, 21 2016

U.S. companies are reshoring and foreign companies are investing in U.S. locations to be in close proximity to the U.S. market for customer responsiveness, flexibility, quality control, and for the positive branding of "Made in USA".

Reshoring including FDI balanced offshoring in 2015 as it did in 2014. In comparison, in 2000-2007 the U.S. lost net about 200,000 manufacturing jobs per year to offshoring. That is huge progress to celebrate!

The Reshoring Initiative Can Help. In order to help companies decide objectively to reshore manufacturing back to the U.S. or offshore, the nonprofit Reshoring Initiative's free Total Cost of Ownership Estimator can help corporations calculate the real P&L impact of reshoring or offshoring. http://www.reshorenow.org/TCO_Estimator.cfm


Sandy Montalbano
Consultant
Reshoring Initiative
Aug, 24 2016

 Good article!  I am sending this to my colleagues who work with me.  We have to keep this in mind.  Thanks!


Robert
Transportation Manager
N/A
Aug, 30 2016

SCM is all about getting the order delivered to the Customer on date/ time requested because happy Customers = Revenue. Using the right tools to do the right job is important and SCM is heavily dependent on sophisticated ERP systems to get right real data info ASP.

I've worked in a DC with more than 400,000 line items and measured the Productivity of Pickers by how many "picks" per day.

I've learned that one doesn't have to remind Germany about your EDI orders.


Ian Jansen
Mr
NHLS
Sep, 14 2016

Challenge - to build and sustain effective relationships at the level of the organizations that are responsible for effectively coordinating and colaborating in an otherwise highly competitive environment 


Don Benson
Partner
Warehouse Coach
Sep, 15 2016

Of course we all need to up our game. We need to move with the times, and always be one step ahead of what the future will bring.


Jade
Admin
Fulfillment Logistics UK Ltd
Oct, 02 2016

Thanks for the article, but I know there's a lot more to this issue than just the pay rates. Please check out my blogs on the subject at www.zipxpress.net.


Mike Dargis
President of asset-based carrier based in the Midwest
Zip Xpress Inc. (at ZipXpress.net)
Oct, 03 2016

Lora, great article! I agree that companies choose the 'safe' solution more often than not. My solution is a bolt-on for legacy ERP's and we even face challeneges of customer adoption. Most like to play it safe and choose an ERP upgrade, which is more costly, time consuming, and has lower ROI across the board. Would love to learn more about your company, we are always looking for partnerships.

Blaine
blaine.schultz@syncron.com


Blaine
Inventory Specialist
Syncron
Nov, 16 2016

This is a game changer in GE's production and prototyping.  It also has huge implications across the GE global supply chain with regard to the management of their support and spare parts network. 


Bob McIntyre
National Account Executive
DBK Concepts LLC
Nov, 21 2016
 

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